China’s fiscal revenue growth slows slightly amid sluggish economic recovery

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BEIJING (Reuters) – China’s fiscal revenue growth slowed slightly in the January-July period compared to the first six months of the year, finance ministry data showed on Wednesday, as the economy was squeezed by the country’s zero-COVID policy and a property crisis.

Fiscal revenue in the first seven months grew 3.2% from a year earlier, excluding the impact of value-added tax credit rebates, slower slightly than a 3.3% rise in the first six months.

In July alone, fiscal revenue shrank 4.1% from a year earlier, the smallest contraction in 4 months, according to Reuters calculations based on the official data.

Massive tax credit rebates are basically completed, totalling more than 2 trillion yuan ($295.05 billion) since the beginning of the year, China Securities Journal reported on Wednesday, citing the finance ministry.

China’s government land sales for July fell 33.2% year on year, narrowing from a 40% drop in June, according to Reuters calculations based on data from the ministry.

Fiscal spending reached 14.68 trillion yuan in the first seven months, up 6.4% from a year earlier, the finance ministry’s data showed.

July’s grim reading of factory and retail sales indicate the world’s second largest economy is struggling to shake off the second quarter’s hit to growth from strict COVID restrictions.

China will step up support for the economy, urging economically important provinces to take the lead in implementing growth policies, state media reported on Tuesday, citing Premier Li Keqiang.

Policy insiders and analysts expect China’s central bank to take more easing steps, but said it faces limited room to manoeuvre due to worries over rising inflation and capital flight.

($1 = 6.7786 Chinese yuan renminbi)

(This story refiles to fix link in last paragraph)

(Reporting by Ellen Zhang and Kevin Yao; Editing by Alison Williams and Kirsten Donovan)

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